Serve Robotics Announces Third Quarter 2024 Results

Rhea-AI Summary

Serve Robotics (NASDAQ: SERV) reported Q3 2024 financial results, highlighting significant operational progress. The company completed $32.3 million in capital raises, ending Q3 with $50.9 million in cash and zero debt. Revenue reached $0.22 million, including $0.04 million from software services. Operational metrics showed strong growth with 465 daily supply hours, up 108% year-over-year. The company announced expansion into Dallas Fort Worth and plans to acquire Vebu's Autocado robot technology. Serve remains ahead of schedule in its agreement with Uber Eats to deploy 2,000 robots by end of 2025.

Positive

• Completed $32.3M capital raise with strong cash position of $50.9M
• 108% YoY increase in daily supply hours to 465
• 97% YoY increase in daily active robots
• Zero outstanding debt obligations
• Geographic expansion into new markets
• Ahead of schedule on Uber Eats 2,000 robot deployment plan

Negative

• Low quarterly revenue of $0.22M
• Potential share dilution from ATM financing program and all-stock Vebu acquisition

Insights

Financial Analyst

The Q3 results reveal mixed signals for Serve Robotics. The $32.3 million capital raise strengthens the balance sheet, with $50.9 million cash and zero debt providing runway for expansion. However, revenue remains minimal at just $0.22 million, indicating early commercialization stage.

Operational metrics show promising growth with 108% year-over-year increase in daily supply hours and 97% growth in active robots. The planned expansion to Dallas Fort Worth and Los Angeles markets, coupled with the Uber Eats partnership targeting 2,000 robots by 2025, suggests significant scaling potential. The Vebu acquisition adds back-of-house automation capabilities, diversifying revenue streams beyond delivery.

Key risks include the early stage nature of the business, high cash burn likely required for expansion and execution challenges in scaling operations across multiple markets. The ATM facility provides additional funding flexibility but could lead to dilution.

Market Research Analyst

The autonomous delivery market positioning shows strategic evolution through three key developments: geographic expansion, vertical integration and partnership diversification. The Wing Aviation and Shake Shack partnerships expand market reach beyond traditional food delivery. The Vebu acquisition, particularly the Autocado robot, represents vertical integration into kitchen automation - a $29 billion market opportunity.

The operational metrics of 21% quarter-over-quarter growth in daily supply hours and 23% growth in active robots demonstrate improving utilization and scaling efficiency. However, the $0.04 million software revenue from Magna suggests nascent B2B opportunities that need development.

• Announced plans for geographic expansion into the Dallas Fort Worth metro
• Completed $32.3 million in capital raise transactions; Cash balance of $50.9 million as of third quarter end
• Announced agreement to acquire Vebu and its pioneering avocado-processing robot, Autocado

SAN FRANCISCO, Nov. 7, 2024 /PRNewswire/ -- Serve Robotics Inc. (the "Company" or "Serve") (Nasdaq: SERV), a leading autonomous sidewalk delivery company, today announced financial results for the third quarter 2024 ended September 30, 2024.

"During the third quarter we made significant operational and financial progress related to several priorities; laying the foundation for a successful 2025," said Dr. Ali Kashani, Serve's Co-founder and CEO. "Regarding our agreement with Uber Eats to deploy 2,000 robots by year end 2025, we are ahead of schedule with the initial manufacturing and rollout. We remain on track to deploy 2,000 new robots across multiple markets next year. Furthermore, we announced the potential acquisition of Vebu, which brings us into a strategically adjacent service offering, and we initiated partnerships with Wing Aviation and Shack Shack to expand our reach.  Importantly, we successfully raised $32.3 million in new capital to provide financial flexibility and fund our expansion plans."

Second Quarter 2024 and Recent Highlights 

• Capital Raise Transactions: On July 17, 2024 and August 27, 2024, Serve completed private placement offerings resulting in a total of $32.3 million in net proceeds. As of September 30, 2024, Serve had $50.9 million in cash and zero outstanding debt obligations. Post quarter-end, the company also established and At-the-Market ("ATM") financing program providing further flexibility in capital raising.
  
  
• Operational Performance: Serve averaged 465 daily supply hours during the third quarter 2024, a 108% increase year-over-year and a 21% increase quarter-over-quarter. The Company also achieved a 97% increase in daily active robots year-over-year and a 23% increase quarter-over-quarter.
  
  
• Geographic Expansion: Serve announced its plan for geographic expansion in Los Angeles, as well as entry into the Dallas Fort Worth market. In the coming weeks, Serve will expand its Los Angeles delivery service into the Downtown LA, Sawtelle and Westwood areas, with a delivery fleet deployment expected in Dallas Forth Worth by the end of Q2 2025. Serve will also begin operations in Dallas, expected in the coming weeks in support of our partnership with drone-maker, Wing Aviation.
  
  
• Vebu Acquisition: Today, Serve announced its agreement to acquire the assets of Vebu, Inc. ("Vebu") in an all- stock transaction, subject to customary closing conditions. Vebu's signature robotic product is the Autocado. The acquisition is expected to strengthen Serve's strategic position by providing its restaurant partners with a suite of automation solutions and expanding Serve's offering beyond delivery into back of house automation.

Third Quarter Financial Highlights

• Third quarter revenue was $0.22 million, including $0.04 million of software service revenue derived from the Company's software services agreement with Magna.
  
  
• As of September 30, 2024, the Company had $50.9 million of cash and cash equivalents.
  
  
• As of September 30, 2024, the Company had 39.6 million shares of common stock outstanding.  

Quarterly Conference Call

Company management will host a conference call and webcast today at 2:00 p.m. PT / 5:00 p.m. ET to discuss the financial  results and provide a corporate update. A live webcast and replay can be accessed from the investor relations page of Serve Robotics' website at Investor Relations — Serve Robotics.

Individuals interested in listening to the conference call may do so by dialing 1 (800) 715-9871 and referencing conference  ID#: 3511636.

About Serve 

Serve develops advanced, AI-powered, low-emissions sidewalk delivery robots that endeavor to make delivery sustainable and economical. Spun off from Uber in 2021 as an independent company, Serve has completed tens of thousands of deliveries for enterprise partners such as Uber Eats and 7-Eleven. Serve has scalable multi-year contracts, including a signed agreement to deploy up to 2,000 delivery robots on the Uber Eats platform across multiple U.S. markets.

For further information about Serve  (Nasdaq: SERV), please visit www.serverobotics.com or follow us on social media via X (Twitter), Instagram, or LinkedIn @serverobotics.

Supplemental Financial Information

The key metrics and financial tables outlined below are metrics that provide management with additional understanding of  the drivers of business performance and the Company's ability to deliver stockholder return. Investors should not place undue reliance on these metrics as indicators of future or expected results. The Company's presentation of these metrics may differ from similarly titled metrics presented by other companies and therefore comparability may be limited.

Table 1: Key Metrics 

	Three Months Ended						Nine Months Ended
	September 30, 2024		June 30,  2024		September 30, 2023		September 30, 2024		September 30,  2023
Key Metrics	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Daily Active Robots (1)	59		48		30		49		27
Daily Supply Hours (2)	465		385		224		384		188

(1)	Daily Active Robots: The Company defines daily active robots as the average number of robots performing daily deliveries during the period.
(2)	Daily Supply Hours: The Company defines daily supply hours as the average number of hours the Company's robots are ready to accept offers and perform daily deliveries during the period.

Table 2: Revenue 

	Three Months Ended						Nine Months Ended
	September 30, 2024		June 30, 2024		September 30, 2023		September 30, 2024		September 30, 2023
Software services	$38,767		$296,035		$—		$1,185,903		$—
Delivery services	112,288		75,540		54,065		239,588		111,784
Branding fees	70,500		140,650		8,500		211,150		53,042
	$221,555		$512,225		$62,565		$1,636,641		$164,826

 

Forward Looking Statements 

This Serve Robotics Inc. (the "Company") investor presentation contains "forward-looking statements," within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the context of the statement and generally arise when we or our management are discussing our beliefs, estimates or expectations. Such statements generally include the words "believes," "plans," "intends," "targets," "may," "could," "should," "will," "expects," "estimates," "suggests," "anticipates," "outlook," "continues," or similar expressions. These statements are not historical facts or guarantees of future performance, but represent management's belief at the time the statements were made regarding future events which are subject to certain risks, uncertainties and other factors, many of which are outside of our control. Actual results and outcomes may differ materially from what is expressed or forecast in such forward-looking statements. Forward-looking statements include, without limitation, statements regarding the Company's partnership with Magna, timing of the Company's robot deployment, the Company's ability to expand to additional markets, capabilities of the Company's robots, outcomes of planned acquisitions, and the Company's timing and ability to scale to commercial production.

The forward-looking statements contained in this investor presentation are also subject to other risks and uncertainties,  including those more fully described in our filings with the Securities and Exchange Commission ("SEC"), including in the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations'' in our Annual Report on Form 10-K for the year ended December 31, 2023, our Quarterly Report on Form 10-Q for the three months ended September 30, 2024, and in the Company's subsequent SEC filings. The Company can give no assurance that the plans, intentions, expectations or strategies as reflected in or suggested by those forward-looking statements will be attained or achieved. The forward-looking statements in this presentation are based on information available to the Company as of the date hereof, and the Company disclaims any obligation to update any forward-looking statements, except as required by law. These forward-looking statements should not be relied upon as representing the Company's views as of any date subsequent to the date of this presentation.

Contacts

Media
Aduke Thelwell
Head of Communications & Investor Relations
Serve Robotics
aduke.thelwell@serverobotics.com
347-464-8510

Investor Relations
investor.relations@serverobotics.com   

 

Serve Robotics Inc. Unaudited Condensed Consolidated Balance Sheets As of September 30, 2024 and December 31, 2023 (unaudited)
	September 30, 2024		December 31, 2023
ASSETS
Current assets:
Cash	$50,913,133		$6,756
Accounts receivable	13,099		2,955
Inventory	327,363		774,349
Prepaid expenses	3,452,560		676,969
Escrow Receivable	180,000		-
Total current assets	54,886,155		1,461,029
Property and equipment, net	5,406,261		48,422
Right of use asset	660,286		782,439
Security Deposits	512,659		512,659
Total assets	$61,465,361		$2,804,549
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$3,606,754		$2,050,605
Accrued liabilities	55,440		255,849
Deferred revenue	14,097		-
Note payable, current	—		1,000,000
Note payable - related party	—		70,000
Right of use liability, current portion	436,377		496,963
Lease liability, current portion	1,042,093		2,363,807
Total current liabilities	5,154,761		6,237,224
Note payable, net of current portion	—		230,933
Restricted stock award liability	—		158,617
Right of use liability	135,181		211,181
Total liabilities	5,289,942		6,837,955
Stockholders' equity (deficit):
Preferred stock, $0.0001 par value, 10,000,000 shares authorized, no shares issued       or outstanding as of both September 30, 2024 and December 31, 2023	—		-
Common stock, $0.0001 par value; 300,000,000 shares authorized, 42,957,446 and       24,832,814 shares issued and 42,844,956 and 24,508,795 shares outstanding as       of September 30, 2024 and December 31, 2023	4,283		2,450
Additional paid-in capital	150,577,074		64,468,141
Subscription receivable	—		(169,616)
Accumulated deficit	(94,405,938)		(68,334,381)
Total stockholders' equity (deficit)	56,175,419		(4,033,406)
Total liabilities and stockholders' equity (deficit)	$61,465,361		$2,804,549

 

Serve Robotics Inc. Unaudited Condensed Consolidated Statements of Operations For the Three and Nine Months Ended September 30, 2024 and 2023; and Three Months Ended June 30, 2024 (unaudited)
	Three Months Ended						Nine Months Ended
	September 30, 2024		June 30, 2024		September 30, 2023		September 30, 2024		September 30, 2023
Revenues	$221,555		$468,375		$62,565		$1,636,641		$164,826
Cost of revenues	377,304		326,013		572,537		1,055,755		1,331,165
Gross profit (loss)	(155,749)		142,362		(509,972)		580,886		(1,166,339)
Operating expenses:
General and administrative	1,980,087		1,873,320		1,428,143		4,861,478		3,414,949
Operations	917,350		871,211		558,068		2,329,535		1,672,403
Research and development	5,007,985		5,787,906		2,962,812		17,434,332		7,171,446
Sales and marketing	383,902		165,612		118,793		667,750		481,511
Total operating expenses	8,289,324		8,698,049		5,067,816		25,293,095		12,740,309
Loss from operations	(8,445,073)		(8,555,687)		(5,577,788)		(24,712,209)		(13,906,648)
Other income (expense), net:
Interest income (expense), net	448,854		(260,120)		(1,483,390)		(1,137,788)		(2,021,996)
Loss on conversion of note payable	-		(221,560)		(149,000)		(221,560)		(149,000)
Change in fair value of simple agreements for future equity	-		-		(435,794)		-		(1,672,706)
Total other income (expense), net	448,854		(481,680)		(2,068,184)		(1,359,348)		(3,843,702)
Provision for income taxes	-		-		-		-		-
Net loss	$(7,996,219)		$(9,037,367)		$(7,645,972)		$(26,071,557)		$(17,750,350)
Weighted average common shares outstanding - basic and diluted	40,586,781		29,176,370		18,528,262		33,267,589		10,674,991
Net loss per common share - basic and diluted	$(0.20)		$(0.62)		$(0.41)		$(0.78)		$(1.66)

 

Serve Robotics Inc. Unaudited Condensed Consolidated Statements of Cash Flows For the Nine Months Ended September 30, 2024 and 2023 (unaudited)
	Nine Months Ended September 30,
	2024		2023
Cash flows from operating activities:
Net loss	$(26,071,557)		$(17,750,350)
Adjustments to reconcile net loss to net cash used in
Depreciation	36,560		1,396,919
Stock-based compensation	9,930,480		304,256
Amortization of debt discount	1,677,942		816,715
Warrants issued with convertible note	-		991,000
Change in fair value of derivative liability	221,560		149,000
Change in fair value of simple agreements for future equity	-		1,672,706
Interest on recourse loan	-		(2,797)
Changes in operating assets and liabilities:
Accounts receivable	(10,144)		19,742
Inventory	446,986		(250,459)
Prepaid expenses	(2,775,591)		(517,233)
Escrow receivable	(180,000)		-
Accounts payable	1,556,149		782,454
Accrued liabilities	(110,870)		129,481
Deferred revenue	14,097		-
Right of use liabilities, net	(14,433)		(35,782)
Net cash used in operating activities	(15,278,821)		(12,294,348)
Cash flows from investing activities:
Purchase of property and equipment	(5,394,399)		(2,493)
Net cash used in investing activities	(5,394,399)		(2,493)
Cash flows from financing activities:
Proceeds from issuance of common stock pursuant to	35,849,136		-
Proceeds from issuance of pre-funded warrants to	17,115,963		-
Proceeds from exercise of warrants	16,324,832		-
Proceeds from convertible notes payable	4,844,625		2,798,410
Proceeds from exercise of options	86,755		-
Proceeds from note payable, net of offering costs	-		750,000
Repayments of note payable	(1,250,000)		(1,500,000)
Proceeds from note payable, related party	-		449,000
Repayments of notes payable, related party	(70,000)		(449,000)
Issuance of common stock pursuant to Merger, net of	-		10,026,258
Proceeds from simple agreement for future equity	-		2,666,953
Repayment of lease liability financing	(1,321,714)		(1,658,359)
Net cash provided by financing activities	71,579,597		13,083,262
Net change in cash and cash equivalents	50,906,377		786,421
Cash and cash equivalents at beginning of period	6,756		2,715,719
Cash and cash equivalents at end of period	$50,913,133		$3,502,140

 

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SOURCE Serve Robotics Inc.

FAQ

What was Serve Robotics (SERV) revenue in Q3 2024?

Serve Robotics reported revenue of $0.22 million in Q3 2024, including $0.04 million from software services.

How much cash does Serve Robotics (SERV) have as of Q3 2024?

Serve Robotics had $50.9 million in cash and cash equivalents as of September 30, 2024, with zero outstanding debt.

What was Serve Robotics (SERV) operational growth in Q3 2024?

Serve achieved 465 daily supply hours, representing a 108% year-over-year increase and 21% quarter-over-quarter growth.

What new markets is Serve Robotics (SERV) expanding into in 2024-2025?

Serve is expanding in Los Angeles (Downtown LA, Sawtelle, and Westwood areas) and entering the Dallas Fort Worth market by Q2 2025.